2015 (10) TMI 1110 - HC - Service Tax

Deposit to be made towards CENVAT Credit and CAM Services Appellant submits that he is facing acute financial hardship and availing of CENVAT credit by the Works Contractor has no bearing to the availability of CENVAT credit by Appellant Revenue bought attention to the fact that the Court directed to deposit 50% of the amount in question within a period of 45 days. Held That - To safeguard interest of Revenue as well as Appellant, Appellant directed to deposit 50% of the amount within a period of 45 days from the date of order. Tribunal shall not dismiss the appellants appeal for non-compliance of direction about pre-deposit and shall decide the appeal on merits Appeal allowed in part and modified in favour of the Revenue.

Summary

Issues:
1. Challenge to order by Customs, Excise & Service Tax Appellate Tribunal (CESTAT)
2. Financial hardship due to recession in real estate market
3. Availment of Cenvat credit by Works Contractor
4. Eligibility for Cenvat credit in respect of inputs and CAM services
5. Disposal of appeal regarding waiver of pre-deposit
6. Grant of Cenvat credit and CAM services
7. Direction to deposit 50% of the amount within 45 days
8. Dismissal of appeal for non-compliance of pre-deposit

Analysis:
1. The appellant challenged the order dated 24-4-2014 by CESTAT, New Delhi, seeking waiver of pre-deposit. The appellant cited acute financial hardship due to the real estate market recession, impacting project completion. The appellant argued that the availment of Cenvat credit by the Works Contractor doesn't affect their eligibility. Reference was made to a ruling by Andhra Pradesh High Court and a case in Mumbai granting stay based on Excise duty and Service Tax payments for construction activities.

2. The appellant highlighted that the CESTAT found them eligible for Cenvat credit in relation to CAM services, with a specific amount due. Referring to a previous order, the appellant contended they should only pay 50% of the Cenvat credit amount. The appellant requested the impugned order be partially set aside for a merit-based appeal decision.

3. The respondent argued that the issue of Cenvat credit liability for Excise duty and Service Tax payments on construction inputs is under appeal. Citing a similar case, the respondent proposed that the appellant should deposit 50% of the disputed amount within 45 days, aligning with previous directives in comparable cases.

4. The Court considered the arguments and financial constraints, concluding that a total or unconditional waiver wasn't warranted. To balance revenue interests and the appellant's circumstances, the Court directed the appellant to deposit 50% of the amount within 45 days. The Tribunal was instructed not to dismiss the appeal for non-compliance and to decide on the merits post the deposit.

5. The judgment emphasized expeditious appeal resolution post the deposit, modifying the impugned order accordingly. No costs were awarded in the case, and the Court's decision was based on the financial situation and legal considerations presented during the proceedings.